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Egypt under the rule of the Ottoman Empire, led by Isma'il Pasha, the Khedive of Egypt, sought to expand his reign to the land of Abyssinia and control the Blue Nile. Isma'il Pasha became the ruler of Egypt in 1863. After annexing Darfur in 1875, he turned his attention to Ethiopia. He wished to create an empire covering the whole of the Nile River, much of which is in Ethiopia, and to do this he built a large army, recruiting many European and American officers. Yohannes IV became the emperor of Ethiopia in 1872 after defeating Tekle Giyorgis II in battle. He worked on modernizing his army, some of whom were trained by the British adventurer John Kirkham.

The Egyptians invaded from their coastal possessions in what is now Eritrea. The armies of Yohannes and Isma'il met at Gundat on the morning of 16 November 1875. The Egyptians were vastly outnumbered and their forces were completely destroyed. News of this huge defeat was suppressed in Egypt for fear that it would undermine the government of the Khedive. The Egyptians tried again to invade from the north, but were again defeated at the battle of Gura in March 1876.